Localiza turns every rental car into two businesses: rent it young, then sell it itself

Localiza was founded in Belo Horizonte in 1973 by two pairs of brothers with six financed Volkswagen Beetles; it grew into Brazil's largest car-rental company, holding about 37.5% of the rental market by the early 2010s. In 2020 it announced a merger with Locamerica/Unidas; completed in 2022, the combination created a company with 15 million clients, more than 530,000 vehicles, 650 rental agencies and 190 used-car sales agencies.

The mechanism is the vehicle-lifecycle flywheel: because rental customers expect new cars, Localiza constantly renews the fleet, and the cars it retires are sold through its own SemiNovos stores rather than dumped. 'We buy, rent, sell, renew the fleet and continue the business cycle,' says the director of Localiza Seminovos — used-car sales generate cash that funds buying the next generation of cars and keep depreciation under control.

Scale compounds the advantage: bulk purchasing power, a very cheap maintenance process and low capital costs ('we buy cars very well... we are a triple-A company') let Localiza sell quality used cars with a 12-month warranty while financing growth internally. By 2022 the combined company reported R$18 billion revenue, R$3 billion profit and R$7 billion EBITDA; Exame named it Company of the Year in 2023 on its 50th anniversary.